Combination of business CPC 15 IFRS 3

When an organization buys control of one or more businesses, the result is the Combination of Businesses, included in CPC 15. This process is also called PPA in the professional jargon (from the English “purchase price allocation”).

In this case, the buyer must account for this combination by applying the acquisition method, which requires:

  1. Identification of the buyer;
  2. Determination of the date of acquisition;
  3. Recognition and measurement of identifiable assets acquired, of liabilities taken on and of share participation of those who are not controllers of the company acquired; and
  4. Recognition and measurement of goodwill for expected future revenues of earnings resulting from an advantageous purchase.

This is a complex process that requires valuation and fair value of tangible and intangible assets and liabilities acquired.

Setape has experience in PPA processes, based on its ample experience in evaluation of tangible and intangible assets.